You have purchased a machine costing $30,000 The machine will be used for two years, and at the end of this time, its salvage value is expected to be $18,000 The machine will be used 6,000 hours during the first year and 8,000 hours during the second year The expected annual net savings will be $35...

Capital recovery cost CR12 30 000 18 000 ...

You have purchased a machine costing $30,000. The machine will be used for two years, and at

Question:

You have purchased a machine costing $30,000. The machine will be used for two years, and at the end of this time, its is expected to be $18,000. The machine will be used 6,000 hours during the first year and 8,000 hours during the second year. The expected annual net savings will be $35,000 during the first year and $42,000 during the second year. If your interest rate is 12%, what would be the equivalent net savings per machine hour?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...